Office 365 has turned into an 800-pound gorilla, with loads of new features and new options. Back then, Office 365 seemed like a cobbled-together mélange of Office 2000 and Exchange Server, with a few goodies tacked on the side. Now it's richer, smoother, more tightly integrated -- and one of Microsoft's major profit centers. Microsoft's revenue from Office 365 is now measured in the billions.

The changes in Google Apps, in direct contrast, are much more subtle. It's still a small, light, considerably cheaper, one-size-fits-all proposition. I've seen significant strides in Office file compatibility and a few new features, but Google's still taking a minimalist approach. While there's nothing wrong with minimalism, particularly with budgets as tight as they are these days, you need to make sure Google Apps can do what you need it to do, before you commit.

At the risk of stretching the metaphor, Office 365 has added several new decks, a top-to-bottom refurbishment, and a couple of new lifeboats. Google Apps has a fresh coat of paint and a new sail. But the original propositions have remained the same: Office 365 aims to be all things to all companies, while Google Apps is content to offer key capabilities without the bloat and complexity.

Which of these propositions meshes more closely with the needs of business users? Back in June 2011, if you asked a handful of execs whether their people need to run Word, Excel, and PowerPoint, you probably would have heard a resounding if unreflective "Yes!" Nowadays, the status of the Office triumvirate isn't nearly as secure. Most execs (at least in my experience) now realize that full-blown Office is overkill for many of their employees. While Office hasn't yet been relegated to the bit bucket of history, the overarching need for Office is lower now than it has been in the past two decades.

That's why I've approached this review from a new perspective. Here I look at both packages' applicability in a mixed environment, where only a small percentage -- perhaps 10 or 20 percent -- of the people using the package actually need Office. Most people, most of the time, don't need Word's or Excel's ginormous feature set. There's no need to swing a sledgehammer when an ordinary hammer will do.

A note about Apple and the iWorks suite: While iWorks contains applications that handle the basics -- and they're now free for just about everybody -- the apps aren't nearly as capable as the Google Apps, and there's no "glue" to build the kind of infrastructure most businesses (and many individuals) need. It isn't clear at this point if Apple's going to actively pursue the market. We'll just have to wait and see if the company builds it out.

Sorting through the Office 365 SKUs

If you're looking for a simple straight-up comparison of features and prices, you clearly don't understand the game. While Google Apps for Business remains relatively straightforward, with four packages and identical features, Office 365's ecosystem is starting to look like an Exchange Server CAL contract. I fully expect books, seminars, and postgrad university courses are in the offing, to help hapless customers pick from what's available.

Here's the supersimplified list:

Office 365 Small Business, for up to 25 users, does not include the Office 2013 desktop apps (though you would be forgiven for assuming otherwise). However, if you already have licenses for Office 2013, 2010, or even 2007, or Office 2011 or 2008 for Mac, you can use those suites with Office 365. Paying for Office 365 Small Business will let you manage your domain's email and share calendars, with 50GB of email storage per user. (There's no Active Directory, which may be a blessing.) You also get online videoconferencing and free website hosting. SkyDrive Pro comes with the package, with 25GB of file storage space, as does SharePoint with shared email and document folders. All of this costs $60 per year per person.